Ford’s US$3.7B Investment Will Brighten America’s Rust Belt

Ford is adding thousands of new jobs to boost production of its first full-sized electric truck, the F-150 Lightning, which debuted in April 2022, and other advanced electric vehicles. The newly hired workers also will make the brand-new electric E-Transit van in Missouri. From mid-decade in Ohio, they will produce an electric commercial vehicle so new it doesn't even have a name yet.

Ford Motor Company and United Auto Workers leaders on June 2 announced plans to add more than 6,200 new U.S. manufacturing jobs in the Midwest, convert nearly 3,000 temporary UAW-Ford workers to permanent full-time status and provide all hourly employees healthcare benefits on the first day of employment.

Michigan, Missouri, and Ohio are all considered Rust Belt States. These states, and six others, were once the manufacturing center of the United States. Before the 1980s, the region was known as the Steel Belt; when the region fell into decline, it picked up the nickname Rust Belt.

The Industrial Midwest was one of the largest steel-producing regions of the country, employing a large part of the population in manufacturing. But automakers started moving production to southern states and overseas, seeking cheaper labor. The region experienced decay, steel structures built at great expense turned to rust, unemployed workers left to find employment elsewhere.

The name Rust Belt was coined back in 1984 by then Democratic presidential candidate Walter Mondale. At a campaign stop during the presidential election, Mondale criticized incumbent Republican President Ronald Reagan for lifting quotas on steel imports, which had sent the industry into crisis.

Mondale said, "Reagan’s policies are turning our industrial Midwest into a rust bowl." President Reagan won re-election handily, but the region was tagged the Rust Belt.

In the past 30 months, the region has again been devastated by job losses amid pandemic-induced economic shutdowns. The Rust Belt tops the national average in unemployment benefits applications.

ford car electric
Ford began producing the electric F-150 Lightning (Photo courteny Ford)

Ford & Autoworkers Break Labor Relations Precedent

Without waiting for contract negotiations, in fact, a whole year before negotiations were set to begin in 2023, Ford and the United Auto Workers (UAW) came to an agreement on the US$3.7 billion investment and the creation of more than 6,200 new union jobs. The company and the union announced their agreement jointly on June 2.

I APPLAUD THE ACTIONS OF FORD MOTOR COMPANY TO ADDRESS THESE ISSUES OUTSIDE THE REALM OF COLLECTIVE BARGAINING. THESE UNPRECEDENTED STEPS TAKEN BY BILL FORD AND CEO JIM FARLEY ARE BOTH A REFRESHING AND INNOVATIVE APPROACH TO LABOR RELATIONS THE DELIVERS GREAT BENEFIT WHEN MOST NEEDED BY OUR HARDWORKING MEMBERS.

Chuck Browning

Vice President and Director, Ford Department, United Auto Workers

The new manufacturing activities span the three states.

Supported by $3.7 billion of investments in manufacturing facilities across Ohio, Michigan and Missouri, the new UAW-Ford manufacturing jobs are expected to result in the creation of an estimated 74,000 additional indirect non-Ford jobs nationally by the end of 2026. That estimate is based on a 2020 study by the Boston Consulting Group on the economic impact of F-Series production.

The BCG report shows that F-Series production contributes roughly $49 billion to U.S. GDP. In addition, F-Series manufacturing is responsible for 500,000 U.S. jobs. Each direct F-Series job supports an additional 13 to 14 American jobs, in dealerships and local communities around Ford and supplier facilities.

State By State Transformation

Michigan: A $2 billion investment and 3,200 union jobs will be used to increase production of the new F-150 Lightning electric truck to 150,000 per year at Rouge Electric Vehicle Center in Dearborn.

Ford will also produce fossil-fueled vehicles in Michigan - a new Ranger pickup will be manufactured at the Michigan Assembly Plant in Wayne and an all-new Mustang coupe at Flat Rock Assembly Plant.

The investment includes $35 million to build an all-new Ford Customer Service Division packaging facility in Monroe that will create more than 600 union jobs. Operations are expected to begin in 2024 to help accelerate parts shipments for Ford customers.

Michigan has been home to Ford since the company was founded in 1903, and with the June 2 announcement, Ford is deepening its commitment to the state.

"We are thrilled that Ford is advancing its long legacy in Michigan by investing $2 billion to create 3,200 good-paying UAW jobs," said Michigan Governor Gretchen Whitmer, a Democrat. "I am proud that we came together to deliver economic development legislation that has helped us land huge projects creating thousands of jobs."

"With this announcement, Michigan has added nearly 25,000 auto jobs since I took office, and we continue to lead the future of mobility and electrification," Governor Whitmer said. "Let’s continue in this spirit of collaboration to keep growing our economy, creating jobs, and advancing the future of mobility and electrification."

Ohio:

Ford will invest $1.5 billion and create 1,800 union jobs at its Ohio Assembly Plant in Avon Lake to assemble an all-new EV commercial vehicle starting mid-decade, along with an additional 90 jobs and a $100 million investment between the Lima Engine and Sharonville Transmission plants.

"The ingenuity and talent of Ohio’s automotive workforce is second to none, and Ford’s investment in Avon Lake will play an essential role in growing the EV space," said Ohio Governor Mike DeWine, a Republican.

Missouri:

Ford currently has more than 7,000 employees at its Kansas City Assembly Plant. Now, the company announced, Ford will make a $95 million investment and create 1,100 union jobs for a third shift at the plant to make the brand new E-Transit electric van and increase production of the Transit, America’s best-selling commercial van.

"Today’s announcement is great news for our state. For more than 70 years, hardworking Missourians have assembled iconic Ford vehicles, said Missouri Governor Michael Parson, a Republican. "Now, these 1,100 new hourly jobs at the Kansas City Assembly Plant will increase production of the Transit and E-Transit commercial vans, driving Missouri’s economy forward."

The 6,200 new union workers announced June 2 expand the hiring pattern of the 11,000 new jobs Ford announced in September 2021 with its partner the Korean company SK On as part of a joint $11.4 billion investment to create the Blue Oval City in Stanton, Tennessee, and BlueOval SK Battery Park in Glendale, Kentucky - two states that are not part of the Rust Belt.

SK On is known for its goal to protect the environment across the life cycle of batteries -from mining base battery materials, battery production, charging, used battery collection, and finally, recycling.

The development of Blue Oval City is a critical component of Ford’s EV move as it prepares to transition its entire North American lineup to electric vehicles. The automaker increased its planned EV investment to $30 billion by 2025 earlier this year. Further, Ford President and CEO Jim Farley has revealed plans to double Ford’s planned global annual production of electric vehicles to 600,000 units per year by 2024.

"We’re investing in American jobs and our employees to build a new generation of incredible Ford vehicles and continue our Ford+ transformation,” Farley said.

TRANSFORMING OUR COMPANY FOR THE NEXT ERA OF AMERICAN MANUFACTURING REQUIRES NEW WAYS OF WORKING, AND TOGETHER WITH UAW LEADERSHIP, WE ARE LEADING THE WAY AND MOVING FAST TO MAKE IMPROVEMENTS TO BENEFITS FOR OUR HOURLY EMPLOYEES AND WORKING CONDITIONS FOR OUR FACTORY TEAMS.

Jim Farley

Ford Motor Company President and CEO

All these actions come a year after the company detailed its Ford+ plan to transform its global automotive business, accelerating the development and scaling of breakthrough electric, connected vehicles.